Posted May 02, 2008 10:49 pm CDT
A New York appeals court has reinstated a $20 million malpractice and fraud suit brought by a grandson of newspaper magnate William Randolph Hearst against the grandson’s wife and the couple’s lawyer.
After he suffered a debilitating stroke in 1989 at age 55, John Randolph Hearst Jr. contends, his wife, Barbara, with the help of the couple’s lawyer, transferred $20 million worth of property and investments into her own name, reports the New York Law Journal. The suit also named a trustee as a defendant.
A trial court had converted the defendants’ motion to dismiss to a motion for summary judgment, which he granted. However, the lawsuit was reinstated last week by the Appellate Division, 2nd Department. It found that the trial judge had misunderstood the burden of proof for undue influence claims, and that Hearst had established a prima facie case against defendant Leonard Ackerman and his law firm, Ackerman & O’Brien in East Hampton.
As the appeals court explains in its opinion: “The plaintiff alleges that Ackerman represented both Barbara and himself, and was thereby burdened by a conflict of interest, that Ackerman aided Barbara’s misappropriation of his assets, and concealed these activities from him. Consequently, there are triable issues of fact with respect to the cause of action alleging legal malpractice … as well as the cause of action alleging the aiding and abetting of fraud, insofar as asserted against the Ackerman defendants.”